After a 93% rise in the number of complaints regarding payment protection insurance (PPI) in the first six months of this year, Barclays Bank is expecting another wave of complaints in the second half of the year.
Complaints had increased quickly
The purpose of this insurance is to cover borrowers’ loan repayments in the event that they fall ill, die or even lose their jobs which at the moment more probable than the other options.
The bank has said that complaints regarding this type of insurance had increased very quickly because banks had lost their legal challenge on PPI rules in April.
Barclays in particular have realised a 14% fall in complaints about its own service, but it has seen 73,000 complaints regarding PPI. This is a marked increase compared with 2010 when the number of complaints in the same period equalled 38,000.
The bank have said that they are expecting higher numbers of complaints regarding PPI in the last six months of 2011 as they have witnessed a rise in the complaint volumes after the judicial review about PPI.
The bank has said: “Barclays is working hard to clear PPI complaints as quickly as possible; prioritising customers who were held up in the judicial review and resolving all complaints in a transparent and efficient manner.”
The high street bank is trying to resolve the matter on a ‘no quibble’ basis and in that respect they have put aside £1bn to meet PPI compensation costs.
PPI has been a controversial subject for many years, and consumer groups have been campaigning against the mis-selling of the policies for many years. The result for these groups has been a positive one, since through their effort new rules were put down on how banks should deal with the cases of mis-selling PPI in the past. The end to this situation has seen an extra compensation bill come to fruition which will run into billions of pounds.